Time to quit M&S Everyday Savings account before April as savers brace for a steep dip

Savers in the M&S Everyday Savings account should get out now before a Draconian cut of 0.8 percentage points after tax (1 point before) from April.

It is one of the largest single cuts since rates started to tumble last year. The new rate will be a pitiful 0.28 per cent (0.35 per cent).

At the start of the year, savers earned as much as 1.88 per cent (2.35 per cent) on opening an account, including a 0.8 (1) point bonus which ran for a year.

Rate slashed: M&S Everyday Savings account will see a cut of 0.8 percentage points after tax (1 point before) from April. It is one of the largest single cuts since rates started to drop from last year

The bank, part of HSBC, removed the bonus for savers opening an account from January 3.

Savers who opened an account after April 12 last year (the date of the rate cut) and January 2 this year will still earn 1.08 per cent (1.35 per cent) — but only for a limited period. They still qualify for the bonus.

But once they reach their first anniversary of opening the account, the rate will drop to 0.28 per cent (0.35 per cent).

Savers need to check what they are earning on their variable rate account with all banks and building societies.

The rate-cutting frenzy started by the big banks is filtering down to smaller building societies. They are often aimed at accounts no longer available to savers which once paid top rates.

Among the banks, Intelligent Finance (where the deposit taker is Halifax), Scottish Widows (part of Lloyds Bank), Britannia (owned by Co-op) and the Post Office (where the deposit-taker is Bank of Ireland) have all taken the knife to rates they pay loyal savers.

Building societies which have joined in the cutting include Earl Shilton, Leeds, Manchester, Newcastle, Nottingham, Melton Mowbray, Saffron, Skipton and West Bromwich.